Special Home Financing Programs: FHA, VA and USDA Loans

Special Home Financing Programs: FHA, VA and USDA LoansLooking to buy a home in 2016? In addition to conventional mortgages, specialty, government-backed financing programs are available: FHA, VA and USDA loans.

FHA loans: Offered by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), FHA loans offer prospective homebuyers low down payments, low closing costs and easier qualifications. For those buying their first home, down payments can be as low as 3.5% of the purchase price. Borrowers who buy a home with an FHA loan will need to have mortgage insurance, increasing the monthly mortgage payment. FHA loans are available all types of home buyers, not just first-time home buyers.

VA loans: The U.S. Department of Veterans Affairs offers VA loans to veterans with suitable credit, sufficient income and a valid Certificate of Eligibility. VA loans can be used to buy a home or condo, build a home, improve a home, or buy a manufactured home and/or lot. Borrowers can receive 100% financing on the purchase of home, which means there is no down payment.

USDA loans: The U.S. Department of Agriculture assists low and very-low income applicants to purchase homes in rural areas with populations less than 35,000. Income must be less than 115% of the adjusted area median income (AMI) which varies by county. Many restrictions apply, and most prospective homeowners will not qualify.

Each of these loan programs is backed by the federal government and has its own eligibility requirements and restrictions. To find out more about these programs, and determine if you qualify, contact your bank or mortgage lender.



Marti Reeder, Realtor, Managing Broker